Inside The Facebook-WhatsApp Megadeal: The Courtship, The Secret Meetings, The $19 Billion Poker Game
Eric Nakagawa stashed this in startups
Here's the money quote from Zuck:
Its 470 million users have already erased $33 billion in SMS revenue from wireless carriers that got rich and fat charging per text. WhatsApp charges nothing for the first year and then asks you to pay $1 a year thereafter. No ads, no stickers, no premium upgrades. In later discussions Zuckerberg promised the WhatsApp founders “zero pressure” to make money, saying, “I would love for you guys to connect 4 to 5 billion people in the next five years.”
WhatsApp could eventually make Zuck a lot of money. It costs WhatsApp five cents to support each user, and it’s charging customers in only a handful of countries, like the U.S. and Britain, where mobile payments are relatively mature. WhatsApp believes $1 billion in annual revenue is within reach by 2017 as the service grows and billing falls into place. Insiders say the app could also start charging airlines or companies like Uber for the right to send messages to WhatsApp users with their permission.
The big risk, as always, is a mass exodus of users to the next new thing. That doesn’t seem likely right now. WhatsApp, Acton confirms, has been signing up a million new users per day since Dec. 1, 2013.
Board seat was a very important part of the deal:
Zuckerberg got Koum over to his house Monday night and finally floated the idea of an acquisition that would leave WhatsApp independent and crucially, make Koum a board member of Facebook. “It was a partnership, where I would help him make decisions about the company,” Koum recalls. “The combination of everything that was discussed is what made it very interesting for us.”
The next day Koum and Acton drove to Google’s Mountain View headquarters and met with Page and Pichai in one of the company’s gleaming conference rooms. They talked for an hour about the world of mobile and WhatsApp’s goals. “It was a pleasant conversation,” says Koum. Page, he adds, is “a smart guy.”
When asked if he got the impression Page was interested in buying WhatsApp, Koum pauses. “No,” he says. Maybe there was a hint? “Maybe I’m not good at reading him.”